Urge to merge fails to surge

When GGT finally fumbled its way to a 105m takeover of the French agency network BDDP a little over a year ago Lorna Tilbian, a leading City analyst, commented drily: ‘It’s not without risks’ (MW September 27 1996). Mild understatement, as events have turned out.

The ‘merger’ was admirably conceived, in strategic terms. The middle is a very uncomfortable place to be these days and the deal promised to catapult two medium-sized companies from international players into a global force. GGT trebled in size and BDDP found an elegant way of escaping its increasing indebtedness.

Sadly, reality has not matched expectations so far. While teething troubles were to be expected from such complicated deal-making, the result has scarcely been a case of ‘reculer pour mieux sauter’. To outward appearances, GGT chief executive Mike Greenlees is engaged in a non-stop shuttle service patching up the far-flung BDDP empire and placating disaffected clients. A state of affairs which cannot be healthy for the rest of his business.

It is interesting to speculate how this instability came about. A major part of the problem originates in the structure of the two networks. While there was no serious conflict involved, neither did the merger create a strong backbone of international clients. BDDP brought a list of blue-chip clients, but none had the advantage of being truly worldwide – at time when there is a strong trend towards global centralisation of accounts. Tag Heuer, for which BDDP had produced showcase advertising, was probably the nearest thing to a global client. Unfortunately, the business has just been lost in its entirety to BBH.

Arguably, the strong regional flavour of the network’s roster is also leading to managerial difficulties. This has become particularly apparent in the US, where Greenlees has had to grapple with the running sore that is Wells BBDP – the substantial part of BDDP.GGT’s North American operations. The keystone $125m P&G account guaranteed the US management team – headed by Frank Assumma – a high degree of independence from London. But just recently things have gone badly awry, forcing Greenlees to intervene personally. Wells has lost two major accounts, Liberty Mutual and much of Bristol Myers, in as many months. It has also shed much of its senior management, including its executive creative director, its president and its head of planning. Which sounds like carelessness; certainly it has P&G worried.

But, as if this were not enough, BDDP.GGT is being challenged in other corners of its empire. Its principal representation in the Far East is through a minority stake in the well-regarded Batey group. Nimble footwork will be required here as rival marketing services group WPP has recently bought a 37 per cent stake in Batey – and expects to take full possession by the turn of the century.

You should read this

Vimto has extended its 1.5m national advertising campaign in support of energy drink Indigo. The cartoon press ads show likenesses of celebrities such as Spice Girl Geri Halliwell (pictured), EastEnders’ Grant Mitchell and, curiously in view of this weekend’s FA Cup result, Middlesbrough Football Club manager Bryan Robson experiencing Indigo’s energy lift. The 20 different […]

What are you doing wasting your time on segmentation, targeting and positioning when 2018 is about AI, millennials and Blockchain? Here are seven marketing bandwagons you need to jump on before it’s too late.

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Already a member?

Sign in

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Type anything and hit “enter”

Sign in

Not registered yet?

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.